 |
Whether you are an incoming freshman or a returning college student, summer break is a great time to think about your budget for the next school year. Figuring out how much you'll want to save from your summer earnings will help you breathe a little easier and let you actually enjoy some fun in the sun. Like many people, you may cringe when you hear the word "budget." While it sounds intimidating and time-consuming, it's pretty easy to get started with a budget. Think of it like training wheels - something that will help you keep steady and moving forward, but still allows you to pedal on your own.  Gather the Info To get started, gather some information about how you spend your money. Look over all your expenses from last year by reviewing your online banking statements and/or check register, credit card statements, tuition and fee invoices and other bills. While this may take a little time, it's a good way to reflect on where your money actually went. You may be surprised by how much you spent on eating out, snacks and pizza! And did you really blow $80 on movie rentals? Map it Out Now it's time to map out a plan for next year. First you'll want to identify all your expected sources of income and expenses. Here are some examples:
If you can, list income and expenses by category and by the month you expect to earn or spend the money (download this sample worksheet). For example, if you know that half your tuition bill is due by the end of August and your scholarships, grants and other financial aid also will be credited in that same month, budget those items in the month of August. Keep in mind that any refunds of student aid you expect to receive (such as any remaining loan funds) are intended to last you the entire semester. Having some extra money (surplus) in the early months doesn't mean you should spend those funds all at once. You will want this money to pay for your other monthly expenses throughout the semester. Do the Math After you are done with your lists, add up all your income and expenses for the entire year. Then subtract your total expenses from your total expected income. If the number is positive, you are in good shape. Think about increasing your savings goals; you never know when you may require some emergency cash or you may want to go on a trip next spring break! If the number is negative, you will want to make adjustments to your projected spending. But how do you decide what can be adjusted and what can't? Adjust Wants Vs. Needs Since tuition, fees, and room and board charges are pretty much fixed (unless you can choose a lower cost meal plan), you'll want to reduce your budget for things like snacks, clothing and entertainment. It's all about balancing what you really need versus want you want. You also could consider making some more money by working more hours over the summer. If you still can't get things to balance out it's time to talk to your family and/or a financial aid counselor at your school about other possible sources of funds. However, be cautious not to take on more debt than you can handle. Once you are comfortable with your spending plan, revisit it periodically during the school year. Keep track of your spending and reconcile your records with your bank statements (paper or online) at least once a month. Make adjustments to your budget for things like additional income and changes in monthly cell phone charges. And now that you are in control, take off those training wheels!
READ MORE ARTICLES LIKE THIS >>>
|